Middle East Vertical Farming
In the Middle East and North Africa (MENA) region, where energy and water are premium resources due to the extreme climate, there is incredible demand for local food sources. This became apparent during the COVID-19 pandemic when import supply chains were severely disrupted.
Food imports to the United Arab Emirates during the first quarter of 2020 reached more than 3.5 million tonnes at a value of over AED13 billion. Meanwhile, according to Alpen Capital’s 2019 GCC Food Report, approximately 85 percent of all food consumed across the entire Gulf region is imported. The reasons for this include the climate, water scarcity and limited arable land.
For countries like the UAE, which depends on imports for more than four fifths of its food supply, indoor vertical farming can offer unprecedented benefits. Indoor vertical farms offer the prospect of growing more produce locally and making better use of the region’s limited water resources.
We see a good fit between environment, consumer demand and technology all over the MENA region, from the UAE to Saudi Arabia and Kuwait. We believe that controlled-environment agriculture solutions are especially advantageous in hot and humid climates, where greenhouse cooling cannot maintain temperatures at optimum levels, and well-insulated buildings can be better regulated with climate control systems. However, this kind of controlled-environment agriculture can be costly at first.
"You need the right kind of building with sufficient insulation, and a top of the range climate control system, before you can even start constructing the vertical farm inside of it. But there is a silver lining." - Jesper Hansen, Chief Commercial Officer of YesHealth Group
Consumers in the MENA region are already accustomed to paying premium prices for fresh, leafy vegetables because so little of it can be grown in the outdoors, locally. This means that indoor vertical farm operators can expect a high rate of return on investment, and therefore the initial costs of constructing the building, along with all the advanced climate control and vertical farming technologies inside, can be earned back very quickly.
Prospects for Commercialized Vertical Farming
Globally, the vertical farming market is estimated at around USD80 billion and growing at around 25 percent – with value derived across technology, infrastructure, software and operations. The MENA region’s vertical farming market was worth USD0.6 billion in 2020 and is expected to grow at approximately 26.4 percent per annum, projected to reach USD1.9 billion by 2025. These projections may barely scratch the surface of what we can achieve in the MENA region.
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